Lignin, a low-value waste product from ethanol production
typically burned for industrial power, can be dissolved in
ethanol to create LEO.

John Kornerup, Maersk's chief adviser for climate change, said
LEO would enable the use of the inexpensive energy contained in
the lignin waste product to produce a lower-cost, carbon-neutral
fuel that can be burned on large marine engines.

"As such it has the potential to become a viable solution," he
told Reuters on Tuesday.

Copenhagen University is engaged in laboratory work on the fuel
before the project moves to a test phase on small stationary
engines in the second quarter of 2020.

Kornerup said depending on the success of further testing phases
and on actual ships, the project could become operational in a
couple of years. He declined to comment on how much would be
invested in the initiative.

"Regardless the final outcome, this project will significantly
contribute to the overall understanding of the issues and the
potential solutions to shipping's decarbonization challenge," he
said.

Lina Ödeen, sustainability manager with H&M Group's global
logistics, said it sourced the majority of its transport needs by
sea to their warehouses.

"We believe we have to move towards other alternatives, such as
biofuel, which is what is being developed under the LEO
coalition," Ödeen told Reuters.

Shipping companies are exploring solutions ranging from using
high quality paint to working on infrastructure to enable zero
carbon ships to be on the water by 2030, which is seen as the
latest time to be ready for 2050 given that ships have a lifespan
of up to 25 years.